Legislature(2021 - 2022)GRUENBERG 120

03/27/2021 01:00 PM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
*+ HB 5 SEXUAL ASSAULT; DEF. OF "CONSENT" TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= HB 55 PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
        HB  55-PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS                                                                    
                                                                                                                                
2:13:45 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  announced that the final  order of business                                                               
would be HOUSE BILL NO. 55,  "An Act relating to participation of                                                               
certain peace  officers and firefighters  in the  defined benefit                                                               
and  defined   contribution  plans   of  the   Public  Employees'                                                               
Retirement  System of  Alaska; relating  to eligibility  of peace                                                               
officers  and firefighters  for  medical,  disability, and  death                                                               
benefits;  relating   to  liability  of  the   Public  Employees'                                                               
Retirement  System  of Alaska;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
2:14:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANDY JOSEPHSON,  Alaska State  Legislature, prime                                                               
sponsor, briefly reviewed  HB 55 for the committee.   He said the                                                               
bill  would   restore  a  public   safety  PERS   [Alaska  Public                                                               
Employee's Retirement System] defined  benefit plan for the first                                                               
time in 15  years to a segment of Alaska's  workforce - a segment                                                               
that, due to  a lack of pension opportunities in  this state, are                                                               
leaving  Alaska  after "hundreds  of  thousands  and millions  of                                                               
dollars" are  spent by the state  to train them effectively.   He                                                               
added that  in the instances  these workers stay in  Alaska, they                                                               
have inadequate  funds to enjoy  retirement in a  reasonable way.                                                               
He  went  on  to  discuss   the  main  components  of  the  bill,                                                               
explaining that  [public safety] workers would  contribute a base                                                               
of  8  percent as  employee  contribution  to their  own  defined                                                               
benefit, which  could rise to  10 percent  on command of  the ARM                                                               
[Alaska  Retirement Management]  Board.   The total  contribution                                                               
would  be 22  percent from  the employer,  which is  identical to                                                               
Tiers  III and  IV.   He said  the vesting  would be  five years;                                                               
however, the  provisions include a  minimum retirement age  of 55                                                               
with 20  years of service.   Furthermore, to increase  the plan's                                                               
affordability, there  is a "high  five averaging to look  back on                                                               
their salary,"  as well as a  post-retirement pension adjustment,                                                               
which could  be removed if the  funding of the plan  is less than                                                               
90 percent.   He noted that currently, the overall  system is not                                                               
at 90  percent.  He  summarized the saving  mechanisms, including                                                               
the five-year averaging,  the 10 percent base  rate increase, and                                                               
the  absence of  full medical  coverage.   For these  reasons, he                                                               
shared his belief that the bill is urgent.                                                                                      
                                                                                                                                
2:18:00 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS opened invited testimony.                                                                                  
                                                                                                                                
2:18:31 PM                                                                                                                    
                                                                                                                                
PAUL  MIRANDA,  President,   Alaska  Professional  Fire  Fighters                                                               
Association  (AKPFFA),   introduced  himself  and   informed  the                                                               
committee that he is currently  an engineer at the Anchorage Fire                                                               
Department.  He introduced his associate, Tom Wescott.                                                                          
                                                                                                                                
2:19:00 PM                                                                                                                    
                                                                                                                                
TOM  WESCOTT,  Alaska  Professional  Fire  Fighters  Association,                                                               
introduced himself as the former  president of AKPFFA and said he                                                               
is available to answer questions from the committee.                                                                            
                                                                                                                                
2:19:27 PM                                                                                                                    
                                                                                                                                
MR. MIRANDA  introduced a PowerPoint presentation,  titled "Costs                                                               
of Maintaining the  Status Quo."  He said the  purpose of today's                                                               
presentation  is to  illustrate that  Alaska is  facing a  public                                                               
safety recruitment  and retention crisis.   He directed attention                                                               
to slide  2, explaining  that since Tier  IV became  effective in                                                               
2006,  several   unintended  consequences  became   apparent  for                                                               
Alaska's  public  safety  employees.    He  reported  recruitment                                                               
difficulties  in   Alaska's  public  safety  agencies,   such  as                                                               
Department  of Public  Safety  (DPS),  Department of  Corrections                                                               
(DOC),  and  municipal fire  and  police  departments across  the                                                               
state.   He said Alaska can  no longer compete with  the Lower 48                                                               
when  attempting  to recruit  public  safety  employees.   Police                                                               
officers and  paramedics are  in high  demand across  the country                                                               
and Alaska  is at a  clear disadvantage compared to  other states                                                               
with regard  to retirement and  benefits.  He asserted  that Tier                                                               
IV is  unlike any public  safety retirement plan in  the country,                                                               
and  it is  part of  the reason  Alaskan communities  struggle to                                                               
fill public  safety positions.  He  addressed impactful retention                                                               
costs, which  would be illustrated  in later slides,  adding that                                                               
crucial  dollars  are  being  siphoned  off  while  dealing  with                                                               
separations  and   a  recruitment  process  that   is  made  more                                                               
difficult by the  benefit package.  He stated  that once Alaska's                                                               
agencies  find  an  employee  and  invest  time  and  money  into                                                               
him/her, there  is a  need to  get a  return on  that investment.                                                               
Additionally,  he  anticipated   increased  workers  compensation                                                               
costs as  agencies become  staffed with  an older  workforce that                                                               
lacks the financial security to retire.                                                                                         
                                                                                                                                
2:22:02 PM                                                                                                                    
                                                                                                                                
MR. MIRANDA  turned to slides  3 and 4, which  featured testimony                                                               
from  police and  fire chiefs  that highlighted  the difficulties                                                               
surrounding  recruitment  and  retention.    He  added  that  the                                                               
state's own actuary  assumes increased retention with HB  55.  He                                                               
addressed  workers compensation  costs  on slide  5, noting  that                                                               
individuals under  the Tier  IV plan have  not yet  retired after                                                               
working a  full 20/25-year  career in  public safety  because the                                                               
plan is  only 15 years  old.  He recalled  a slide from  the bill                                                               
sponsor's   presentation   on   3/13/21   that   detailed   three                                                               
independent  reviews of  Tier  IV, all  indicating  that most  of                                                               
Alaska's public safety  employees would mot have  enough money to                                                               
retire, even after  a 30-year career.   Additionally, many public                                                               
safety  employees do  not  participate in  Social  Security.   He                                                               
reported that  the average hiring  age of a public  safety worker                                                               
is  31;  therefore, as  agencies  become  staffed with  an  older                                                               
workforce that  lacks the financial  security to  retire, workers                                                               
compensation costs  are likely  to increase  due to  the physical                                                               
nature of  the job  and the likelihood  that older  public safety                                                               
employees get injured at much higher  rates.  According to a Rand                                                               
Corporation study on  California firefighters, older firefighters                                                               
are particularly  prone to musculoskeletal disorders  (MSDs) with                                                               
an  MSD injury  rate  that  is more  than  double  that of  their                                                               
younger colleagues  and ten times  greater than that  of private-                                                               
sector workers  of the  same age.   In  addition to  the physical                                                               
demand,  he  pointed  out  that individuals  who  are  no  longer                                                               
mentally prepared to do the job  should have the ability to leave                                                               
for their own sake and for the good of the community they serve.                                                                
                                                                                                                                
2:27:58 PM                                                                                                                    
                                                                                                                                
MR. MIRANDA continued  to slide 6 and  outlined unforeseen costs,                                                               
such as increased overtime due  to inadequate staffing; increased                                                               
training  costs;  loss  of   operational  capabilities;  loss  of                                                               
experience  and future  leadership;  and  rise in  organizational                                                               
stress  levels.   He  moved  to slide  7,  which emphasized  that                                                               
recruitment  and retention  problems would  likely increase.   He                                                               
reported  that  current  recruitment and  retention  difficulties                                                               
across Alaska are  occurring with 40-50 percent  of the workforce                                                               
still in  a defined  benefit system; Tier  IV currently  makes up                                                               
50-60  percent of  the public  safety workforce  and the  problem                                                               
would magnify  as that population  grows.   He stated that  a 100                                                               
percent  portable  public  safety   workforce  is  a  frightening                                                               
thought for chief officers around the state.                                                                                    
                                                                                                                                
MR. MIRANDA turned  to slide 8 and reported that  there are 3,400                                                               
public  safety  employees  in  Alaska  that  the  bill  would  be                                                               
applicable to.  He approximated  $120,000 as the average training                                                               
cost, although  some agencies, such  as airport police  and fire,                                                               
report costs as high as $240,000.                                                                                               
                                                                                                                                
2:30:53 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  inquired about  the component costs  of the                                                               
$120,000 figure.                                                                                                                
                                                                                                                                
MR.   MIRANDA  said   it   includes   things  like   recruitment,                                                               
testing/hiring processes, and training academy.                                                                                 
                                                                                                                                
CHAIR  KREISS-TOMKINS noted  his  curiosity  in a  cost/component                                                               
breakdown.   Nonetheless,  he acknowledged  that  retention is  a                                                               
problem.                                                                                                                        
                                                                                                                                
2:32:45 PM                                                                                                                    
                                                                                                                                
MR.  MIRANDA offered  to follow  up  with that  information.   He                                                               
resumed the presentation on slide  9, titled "what is the 'fiscal                                                               
note' for maintaining the status quo?"   He relayed that both DPS                                                               
and  DOC  had  testified  to the  legislature  of  non-retirement                                                               
separations greater  than 6 percent.   He reminded  the committee                                                               
that  this is  occurring  when  Tier IV  makes  up  less than  60                                                               
percent of the overall public  safety workforce.  He proceeded to                                                               
examine the  $120,000 average training  cost - not  increased for                                                               
inflation - and  the costs of losing one, two,  and three percent                                                               
of a Tier  IV workforce each year  on slides 10-12.   The cost of                                                               
losing one  percent of the  workforce, or 34 employees,  would be                                                               
$4,080,000 over  a one-year period, $20,400,000  over a five-year                                                               
period,  and $81,600,000  over a  20-year  period.   The cost  of                                                               
losing two percent,  or 68 employees, would be  $8,160,000 over a                                                               
one-year  period,  $40,800,000  over   a  five-year  period,  and                                                               
$160,200,000 over a  20-year period.  Lastly, the  cost of losing                                                               
three  percent  of the  workforce,  or  102 employees,  would  be                                                               
$12,240,000 over a one-year period,  $61,200,000 over a five-year                                                               
period, and $244,800,000 over a 20-year period.                                                                                 
                                                                                                                                
2:35:50 PM                                                                                                                    
                                                                                                                                
MR. MIRANDA  turned to slide 13/14  and said these costs  are not                                                               
fully representative of the problems  that would result from non-                                                               
retirement separation of public  safety employees.  He emphasized                                                               
that current costs far outweigh the  cost of HB 55, adding that a                                                               
one percent  improvement in retention  would more than  cover the                                                               
cost  of the  bill.   He further  noted that  other jurisdictions                                                               
across the  country have restored  defined benefit  systems after                                                               
facing similar experiences.   He moved to slide  15 and concluded                                                               
by  reiterating that  both  labor and  management  are united  in                                                               
their  support  for  this  legislation.    He  pointed  out  that                                                               
everyone  has  a shared  interest  in  ensuring that  Alaska  has                                                               
quality public  safety employees.   He said adopting  an adequate                                                               
retirement plan with reasonable  costs, fair benefits, and shared                                                               
risk would aid in this mission.                                                                                                 
                                                                                                                                
2:38:20 PM                                                                                                                    
                                                                                                                                
CHAIR   KREISS-TOMKINS   recalled   that  the   bill   had   been                                                               
painstakingly  crafted  to  be  cost-neutral.   He  asked  for  a                                                               
refresher on the cost, if any, of this legislation.                                                                             
                                                                                                                                
2:39:06 PM                                                                                                                    
                                                                                                                                
ELISE  SORUM-BIRK, Staff,  Representative Andy  Josephson, Alaska                                                               
State Legislature,  said the Division of  Retirement and Benefits                                                               
had an  actuary report conducted  on the previous version  of the                                                               
bill and  estimated that the  annual cost would be  $3.5 million.                                                               
She  noted that  the cost  would be  less money  paid toward  the                                                               
unfunded  liability.   She expounded  that under  HB 55,  a small                                                               
amount more  would be paid  directly towards the  employee's plan                                                               
compared to  the current plan;  therefore, less would be  paid to                                                               
the  unfunded  liability.   She  added  that the  division  would                                                               
conduct a new  actuarial analysis for the current  version of the                                                               
bill when it moves to the House Finance committee.                                                                              
                                                                                                                                
CHAIR KREISS-TOMKINS, as a Tier IV  employee, asked if any of his                                                               
compensation went to  the unfunded liability.   He sought further                                                               
clarification on how [the proposed  plan] differentiates from the                                                               
status quo.                                                                                                                     
                                                                                                                                
MS.  SORUM-BIRK   relayed  that  currently,  employers   pay  the                                                               
employee a  certain percentage, which contributes  to retirement.                                                               
She cited an Alaskan  law - SB 125; adopted in  2008 - which sets                                                               
employer contribution rates for PERS  and obligates the ARM Board                                                               
to calculate total annual contributions  required to maintain the                                                               
plan's service liability each year.   She said, for example, that                                                               
the rate  for PERS in Alaska  this fiscal year was  30.85 percent                                                               
and under current  law, the employer contributes  22 percent with                                                               
the state making up the difference if it's not a state employer.                                                                
                                                                                                                                
CHAIR KREISS-TOMKINS  interjected to  verify that  Ms. Sorum-Birk                                                               
was speaking in reference to Tier IV.                                                                                           
                                                                                                                                
MS. SORUM-BIRK  answered yes.   She continued  to explain  that a                                                               
municipality pays 22 percent, which  is divided between a portion                                                               
that's paid  to the employee and  a portion that's paid  into the                                                               
retirement  system   going  towards  the  unfunded   liability  -                                                               
partially supplemented by the state.                                                                                            
                                                                                                                                
2:42:25 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  offered his  understanding that  every Tier                                                               
IV beneficiary has  a "lock box retirement system"  that both the                                                               
public  sector   and  the  employee   contribute  to,   which  is                                                               
completely  removed from  the defined  benefit  part of  previous                                                               
tiers.   He said he  is surprised to  hear that part  of people's                                                               
benefits under Tier  IV go towards paying  the unfunded liability                                                               
for people in Tiers I-III.                                                                                                      
                                                                                                                                
MS.  SORUM-BIRK  noted that  only  what  the employer  pays  goes                                                               
towards the unfunded liability.                                                                                                 
                                                                                                                                
CHAIR KREISS-TOMKINS asked if the  contribution that goes towards                                                               
the unfunded liability,  represented by Tiers I-III,  is the $300                                                               
million or so odd dollars that the state pays every year.                                                                       
                                                                                                                                
MS. SORUM-BIRK answered, "in simple  terms, yes."  She added that                                                               
sometimes the state chooses to supplement that.                                                                                 
                                                                                                                                
CHAIR KREISS-TOMKINS  said he is  still unclear on how  the state                                                               
is fulfilling  the obligation of  paying down  unfunded liability                                                               
changes with the introduction of "Tier V."                                                                                      
                                                                                                                                
MS. SORUM-BIRK  replied the easiest  way to  think of it  is that                                                               
currently,  a smaller  percentage  of the  employer's 22  percent                                                               
contribution is going towards the  Tier IV employee than would go                                                               
to the  "Tier V"  employee.   She said  employees under  "Tier V"                                                               
would  receive  12  percent  with 10  percent  going  toward  the                                                               
unfunded liability.                                                                                                             
                                                                                                                                
2:45:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY directed the  committee to the state actuary                                                               
report  narrative  [included  in  the  committee  packet],  which                                                               
provided a fiscal  note analysis for the previous  version of the                                                               
bill.   She asked if the  pie graph on page  2 accurately depicts                                                               
the figures being discussed.                                                                                                    
                                                                                                                                
MS. SORUM-BIRK answered yes.                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY  asked for confirmation that  MS. Sorum-Birk                                                               
had stated  that the  proposed retirement  plan is  comparable to                                                               
packages offered by other states.                                                                                               
                                                                                                                                
MS.  SORUM-BIRK  acknowledged that  Washington  is  one of  those                                                               
states.  She deferred to Mr. Wescott for further information.                                                                   
                                                                                                                                
2:46:55 PM                                                                                                                    
                                                                                                                                
MR. WESCOTT said  compared to other states, the  proposed plan is                                                               
a  greatly reduced  benefit from  what  Alaska had  in the  past;                                                               
additionally,  it was  modeled  after  the most  well-functioning                                                               
plans in  the country that  are fully funded, such  as Washington                                                               
and Wisconsin.   He explained  that aspects, such as  the ability                                                               
to raise  employee rates  and the  ability to  withhold inflation                                                               
proofing,  allow the  plan to  get back  on track  should it  get                                                               
behind and make the risk shared  opposed to the state holding all                                                               
the risk.                                                                                                                       
                                                                                                                                
REPRESENTATIVE   JOSEPHSON   shared    his   understanding   that                                                               
Washington's plan  proved so solvent  that the age  of retirement                                                               
was reduced from 55 to 53.  He asked if that is correct.                                                                        
                                                                                                                                
MR. WESTSCOTT confirmed  [that the age of  retirement was lowered                                                               
in Washington].                                                                                                                 
                                                                                                                                
2:49:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY questioned whether  the size of the employee                                                               
population  in  Washington impacted  the  ability  to "drop"  the                                                               
payments.                                                                                                                       
                                                                                                                                
MR. WESCOTT  said he  is unsure whether  the population  size had                                                               
any  significance.   He  acknowledged  that  the pool  of  public                                                               
safety employees in Washington's  system is larger than Alaska's.                                                               
He recalled  that historically, Anchorage's police  and fire plan                                                               
was  widely  successful and  ahead  of  its  time with  only  800                                                               
employees.   He explained that  good and bad plans  are separated                                                               
by those that makes consistent,  steady contributions in the good                                                               
times, as well  as the bad.  Ultimately, he  opined that the size                                                               
doesn't matter if sound practices are followed.                                                                                 
                                                                                                                                
2:52:03 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  inquired about  Alaska engaging in  that in                                                               
the past.                                                                                                                       
                                                                                                                                
MR.  WESCOTT explained  that when  looking  at past  contribution                                                               
rates into PERS, there was a  time in the early 2000s when Alaska                                                               
thought  it   was  better  funded   than  it  was,   so  employer                                                               
contributions fluctuated significantly  lower than today's rates.                                                               
He said  regardless of  being fully funded  or not,  the proposed                                                               
plan  would continue  making minimum  contributions of  8 percent                                                               
for the employee and 12 percent  for the employer.  He added that                                                               
those   who   implemented  Tier   IV   in   2005  recognize   its                                                               
shortcomings,  especially in  regard  to  public safety  careers,                                                               
which are shorter and involve physical and mental stresses.                                                                     
                                                                                                                                
2:55:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR recalled  being  a staff  person during  the                                                               
transition  to  Tier  IV, explaining  that  the  legislature  and                                                               
leadership at that  time implemented $250 million  in budget cuts                                                               
over five years,  which resulted in short  funding the retirement                                                               
system.                                                                                                                         
                                                                                                                                
CHAIR  KREISS-TOMKINS  posited  that  in  effect,  there  was  an                                                               
existing unfunded liability  that needed to be paid  down and the                                                               
state  elected not  to.   Nonetheless,  he pointed  out that  the                                                               
unfunded  liability   existed  because   Tiers  I-III   were  not                                                               
actuarial sound in the first place.                                                                                             
                                                                                                                                
REPRESENTATIVE  TARR agreed  that it  was a  combination of  both                                                               
conjoined with  economic downtowns that exacerbated  the problem,                                                               
which  explains why,  under Governor  Sean Parnell,  there was  a                                                               
substantial deposit in an attempt to catch up.                                                                                  
                                                                                                                                
2:56:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  said the actuarial negligence  can't be                                                               
understated  or  overstated.    He  reported  that  according  to                                                               
Legislative Finance Division, the  settlement was $500 million on                                                               
that item  alone.  He offered  his belief that the  proposed plan                                                               
"[hits] the sweet spot."                                                                                                        
                                                                                                                                
CHAIR    KREISS-TOMKINS   sought    clarification   on    whether                                                               
Representative  Josephson had  said the  actuarial negligence  of                                                               
Tiers I-III can or cannot be overstated.                                                                                        
                                                                                                                                
REPRESENTATIVE   JOSEPHSON   clarified    that   [the   actuarial                                                               
negligence] was severe.  He  offered his understanding that there                                                               
was a  lack of vigilance and  advice was taken by  an actuary who                                                               
failed [the state] as evidenced by the settlement.                                                                              
                                                                                                                                
CHAIR KREISS-TOMKINS said he feels  reassured by what seems to be                                                               
extremely  aggressive  diligence.    He  stated  that  there  was                                                               
unbelievable  intergenerational  injustice between  Tiers  I-III,                                                               
adding  that the  amount of  money  spent by  his generation  and                                                               
those younger  to subsidize  the negligence  of Tiers  I-III each                                                               
year could  pay for pre-kindergarten  and free college  for every                                                               
Alaskan.   He  emphasized  the importance  of  ensuring that  the                                                               
proposed plan  is fully actuarially sound  for future generations                                                               
and reiterated his increasing confidence  that it is [actuarially                                                               
sound].                                                                                                                         
                                                                                                                                
2:59:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON noted that  the legislation mentioned by                                                               
Representative  Tarr  has been  "re-amortized,"  as  it was  $700                                                               
million per  year and  is currently  $350 million  per year.   He                                                               
reported that  the unfunded liability decreased  from $11 billion                                                               
to approximately $6.5 billion.                                                                                                  
                                                                                                                                
CHAIR KREISS-TOMKINS  surmised that the actuarial  negligence and                                                               
incompetence  was  in  addition to  wishful  political  thinking,                                                               
which hurt the state and future generations.                                                                                    
                                                                                                                                
2:59:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY related  that teachers  under the  new tier                                                               
are also  lacking Social Security,  which has  similarly resulted                                                               
in  retention  difficulties across  the  state.   She  questioned                                                               
whether expanding the  proposed plan to all  public employees was                                                               
considered.                                                                                                                     
                                                                                                                                
REPRESENTATIVE JOSEPHSON said he is  aware and sympathetic to it,                                                               
adding that  a new report from  two months ago indicated  that it                                                               
could be done with some degree  of security.  He pointed out that                                                               
there  are  unique  circumstances  associated  with  the  [public                                                               
safety] cohort in addition to the  huge training cost born by the                                                               
state.   He offered  his belief that  the [public  safety] cohort                                                               
would have  more support and could  lead the way, adding  that if                                                               
solvency is proven  over a short number of  years, an opportunity                                                               
could present itself.                                                                                                           
                                                                                                                                
3:01:58 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS,  regarding the "Tier V"  plan's HRA [health                                                               
reimbursement  arrangement],  asked  for   the  analysis  on  how                                                               
sustainable three percent  set aside for health is  - relative to                                                               
projections for  cost of health  care, especially  accounting for                                                               
the rapidly escalating projections.                                                                                             
                                                                                                                                
REPRESENTATIVE  JOSEPHSON said  it  is a  major  "give" from  the                                                               
stakeholders   because   they  are   aware   of   its  cost   and                                                               
unpredictability.   He  deferred  to Ms.  Sorum-Birk for  further                                                               
explanation.                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK relayed  that the  HRA  would act  as a  stopgap,                                                               
adding that the new  tier would have the same HRA  as Tier IV and                                                               
could be  used to pay  for medical  expenses or to  pay premiums.                                                               
She explained  that it's based  off a three percent  average PERS                                                               
salary,  which is  significantly  lower than  the average  public                                                               
safety PERS salary.                                                                                                             
                                                                                                                                
3:03:44 PM                                                                                                                    
                                                                                                                                
MR.  MIRANDA  confirmed  the comments  from  Ms.  Sorum-Birk  and                                                               
Representative Josephson.   He pointed out that  the explosion in                                                               
health  care costs  was  a contributing  factor  to the  unfunded                                                               
liability of  the previous  tiers.  He  calculated that  based on                                                               
the current  cost of pre-Medicare  coverage, the HRA  would cover                                                               
between 3-5  years of medical premiums.   There would still  be a                                                               
gap for  most individuals, but  the bill recognizes  the unwanted                                                               
possibility of  creating an unfunded  liability, which is  why it                                                               
removes  the  pre-Medicare  medical  coverage  that  was  in  the                                                               
previous  defined benefit  tiers.   He added  that employees  can                                                               
look  for ways  to  bridge  the gap  between  retirement age  and                                                               
eligibility age -  the HRA would help with that,  but it wouldn't                                                               
be a total solution.                                                                                                            
                                                                                                                                
3:06:05 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS announced that HB 55 was held over.                                                                        

Document Name Date/Time Subjects
HB 5 Bill Hearing Request 2.23.2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Sponsor Statement 2.23.2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Bill Text 1.8.2021.PDF HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Sectional Analysis 2.23.21.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Legal Memo LAA 1.11.2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Policy Primer - Alaska's Consent Bill - Spring 2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Report Seeking Protection Indian Country 1.30.2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Report Rape Kits 12.30.2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Report DNA Not Collected 12.31.2020.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Report Without Justice In Nome 2.2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Report Disparities in Sexual Assault Crimes in Nome 2.2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Letters of Support (All) 3.24.21.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Fiscal Note - JUD-ACS-03.25.2021.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
SS for HB 5 3.26.2021.PDF HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Letter of Support - Planned Parenthood Votes 3.24.21.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Letter of Support - AK Coalition for Justice 3.27.21.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 5 Sponsor PowerPoint 3.27.21.pdf HSTA 3/27/2021 1:00:00 PM
HB 5
HB 55 pers-trs combination question 3.27.21.pdf HSTA 3/27/2021 1:00:00 PM
HB 55